BitVC Futures Weekly Settlement Summary
Due to extreme market conditions the week of 11/14, BitVC weekly bitcoin futures contracts system loss allocation was 46.1%. A detailed explanation of what happened has already been published. (
http://redd.it/2mieok) A system loss allocation mechanism is a necessary component of bitcoin futures exchanges that offer high leverage, and extreme market events are unavoidable, but BitVC took steps to address users' legitimate concerns and frustrations:
- All BitVC users who had unrealized profits recalled due to system loss allocation were given free credit toward future trading fees for the full amount of profits recalled.
- A BitVC risk reserve fund was established to reduce the scale of system loss allocation in the future. 20% of all BitVC futures commission fees will go to the risk reserve fund; system losses will be borne by the reserve fund, and only if the reserve fund is insufficient will the users be allocated any system loss. BitVC is the only bitcoin futures exchange to offer this form of protection.
- BitVC implemented unprecedented transparency by publishing full details of all forced liquidations in real time. (
https://www.bitvc.com/futures_btc_trades/blasting_order)
This week 11/21 also saw significant price volatility, but BitVC 11/21 bitcoin weekly futures contracts system loss allocation was only 1.877%, and bitcoin quarterly, litecoin quarterly, and litecoin weekly futures had no system loss allocation. System loss due to forced liquidation positions that could not be closed at the target liquidation price was 135.43 BTC, but the risk reserve fund covered 71.82 BTC of the loss, leaving only 63.61 BTC to be allocated to users.(
https://www.bitvc.com/futures_btc_trades/settle_history)
Furthermore, BitVC has decided to reduce maximum leverage for quarterly futures contracts to 10x. Maximum leverage for weekly contracts will remain 20x for now, but if all industry competitors agree to reduce maximum leverage to 10x, BitVC will do so too.
Questions and feedback are always welcome.
